Public Provident Fund update: Has interest rate been revised for Q2 2025? Key benefits and rules investors should know

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NEW DELHI: Good news for investors relying on small savings schemes. The government has kept the interest rates unchanged for the July-September 2025 quarter. The Public Provident Fund (PPF), along with other popular schemes such as the National Savings Certificate (NSC) and Senior Citizen Savings Scheme (SCSS), will continue to offer the same returns as in the previous quarter, as reported by the Economic Times.The PPF remains a popular long-term savings vehicle due to its tax advantages, fixed returns, and government backing. The interest rate for the scheme is reviewed every quarter, but the latest announcement made on June 30, 2025, confirmed that there will be no revision this time.PPF: Triple tax-exempt investmentOne of the standout features of PPF is its EEE (Exempt-Exempt-Exempt) tax status. Here's what that means for investors:

Exempt 1: Contributions up to Rs 1.5 lakh per year qualify for a tax deduction under Section 80C of the Income Tax Act.
Exempt 2: The interest earned on the PPF account is completely tax-free.
Exempt 3: The maturity amount is also exempt from tax.

This makes PPF a highly attractive option for conservative investors looking to grow their wealth safely while reducing their tax liability.How much can you invest in PPF?

Minimum Deposit: Rs 500 per financial year.
Maximum Deposit: Rs 1.5 lakh per financial year.

You must deposit at least the minimum amount each year to keep your PPF account active. If the account is inactive due to non-payment, it can be revived by paying Rs 500 for each missed year along with a penalty of Rs 50 per year.Note: An individual can open only one PPF account, either at a bank or post office. Opening multiple accounts is not allowed and may require corrective action.PPF maturity: What happens after 15 years?The PPF account matures 15 years from the end of the financial year in which it was opened. But maturity doesn’t mean closure. Investors can choose to:

Withdraw the full amount, or
Extend the account in blocks of five years - with or without further contributions.
If you opt to continue making deposits, interest will accrue on both the new and existing balances.

Need funds? You can make partial withdrawalsThough often seen as a long-term locked-in scheme, the PPF does allow for partial withdrawals starting from the seventh financial year. Here's how it works:

You can withdraw the lesser of 50% of the balance at the end of the fourth year or the balance at the end of the preceding year.
These withdrawals can be used for emergencies, education, or medical expenses - and the withdrawn amount is not taxed.

Bottom line for saversThe unchanged interest rates for PPF and other small savings schemes may come as a relief amid ongoing economic uncertainties. For investors looking for safe, long-term, and tax-efficient options, the PPF continues to be a reliable choice.

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